The leading Shiba Inu coin noted a 10% price drop over the past 24 hours. The decline follows increased profit-taking by traders, who took in a staggering $426 million on Tuesday, its biggest single-day sale since 2022.
With continued profit-taking, SHIB price could extend its decline. Here’s why.
Shiba Inu Sellers Unload Parts for Profit
On January 7, The SHIB network made profits/losses (NPL) totaled $426 million, marking its highest daily value since February 2022.
A coin’s NPL measures the difference between the price at which the asset was last moved or sold and the current market price. It tells us how much profit or loss network users “make”.
When an asset’s NPL increases, it indicates that a significant portion of the cryptocurrency held by its investors is being sold at a profit. This sudden influx of selling pressure can put downward pressure on the price of the asset, especially when the market cannot absorb the increased supply.
Further away, SHIB Relative Strength Index (ROI) confirms this surge in selling pressure. At press time, it is below the neutral 50 line at 41.96 and in a downtrend.
The RSI indicator measures oversold and overbought market conditions of an asset. It ranges between 0 and 100, with values above 70 indicating that the asset is overbought and expected to decline. On the other hand, values below 30 suggest that the asset is oversold and could experience a rebound.
SHIB’s RSI reading of 41.96 suggests increasing selling pressure, which is a sign of market weakness. If the RSI continues to decline towards 30, the price of the same part could fall further.
SHIB Price forecast: further declines await us
On the daily chart, SHIB has been trading in a descending parallel channel for the past 30 days – a downtrend formed by two descending parallel trendlines that indicate consistent lower highs and lower lows. This suggests sustained selling pressure. If SHIB stays in this trend, its price could drop to $0.000018.
However, if sales decline and traders start hoarding coins, this bearish outlook would be invalidated. In this case, SHIB Price Could Rebound To $0.000025 and towards $0.000033.
Disclaimer
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